Google is reportedly developing its own autonomous vehicles, which could
become part of a fleet of 'robo-taxis' that pick up passengers on-demand.

Google is in talks with major auto-components manufacturers, such as Continental AG and Magna International, to build new cars to Google’s specifications, according to a report on former WSJ journalist Jessica Lessin's blog.

People familiar with the matter said that Google has been studying how these vehicles could become part of robo-taxi systems that pick up passengers and work commuters on demand, reducing the need for people to own their own cars.

At first, the robo taxis would require humans sitting behind the wheel in case of emergencies, according to the report. Eventually, however, these cars could operate completely autonomously, and would probably be linked to a mobile application.

Google recently led an investment of $258 million in taxi-hailing app Uber, which allows customers to order high-end vehicles from their mobiles within minutes. Uber, which is now valued at $3.5 billion, has prompted the emergence of a string of competitiors, such as Lyft, Hailo and Sidecar.

Google’s current fleet of self-driving cars – which are Toyotas retrofitted with cameras, sensors, radars, and Google software – cost around $150,000 apiece to make. However, Google is keen to make autonomous vehicles as widely available as possible.

The company has reportedly been working to lower the cost by designing some hardware components on its own, but it does not have the facilities or know-how to manufacture its own cars, so will need to partner with a contract manufacturer to build a car to its specifications.

It would also need to team up with a car company that has dealer relationships, in order to make its autonomous vehicles widely available to consumers.

Google has been putting pressure on major car brands to embrace autonomous-navigation technology. Although major auto brands such as Mercedes-Benz, Nissan and Toyota have all developed prototype self-driving cars, most of them do not actually want to build a fully autonomous car, according to the report.

At an event earlier this summer, Dieter Zetsche, chief executive of Daimler AG, owner of Mercedes Benz, reportedly said that his company wants to automate the boring elements of driving, such as being stuck in traffic, but would “never automate the cool part of driving".

Google’s cars have so far only been involved in two accidents – one involved the car being rear-ended after stopping at a red light and the other occurred after a human driver took control of the vehicle.